Wales Pension Partnership announces RI policy
The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh LGPS Funds, has announced a new Responsible Investment (RI) policy, highlighting its commitment to responsible investment and desire to be a leader in this area.
The new overarching policy was developed collaboratively by the WPP and its eight Constituent Authorities* and will be adopted by them all. At the same time, it will allow individual Constituent Authorities to maintain and develop their own RI policies.
Commenting on the development of the new RI policy, Chris Moore, Director of Corporate Services from the WPP Host Authority, says: “Responsible investment policies are vitally important not only to the administration of our funds but to the future of Wales. We recognised how crucial it was for the WPP to establish its own responsible investment policy and aimed to ensure that all stakeholders of the WPP were represented in the policy’s development. Building support and gaining consensus among the Constituent Authorities was imperative. We needed to be sure that the policy was representative of the broad range of investment beliefs within the Pool. We are thrilled to have agreement on a policy that can now be implemented on behalf of the underlying Constituent Authorities. We are all highly committed to seeing this new ambitious RI Policy succeed.”
In its new RI policy, the WPP has agreed to prioritise a number of actions over the next 12 months, including developing a specific climate risk policy and engaging with its investment managers to develop an appropriate set of RI monitoring metrics.
The full RI policy can be found on the Wales Pension Partnership website.
* List of Constituent Authorities
- Cardiff & Vale of Glamorgan Pension Fund
- Clwyd Pension Fund
- Dyfed Pension Fund
- Torfaen Pension Fund
- Gwynedd Pension Fund
- Powys Pension Fund
- Rhondda Cynon Taf Pension Fund
- City and County of Swansea Pension Fund
The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.
It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provide the best of strong public sector governance and transparency.
WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.
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The Wales Pension Partnership is the first LGPS investment pool to appoint a pool operator
The Wales Pension Partnership (WPP) today announces the appointment of Link Fund Solutions Ltd (Link) to establish and run a collective investment vehicle for the sole use of the Local Government Pension Scheme (LGPS) funds in Wales.
The appointment of Link as the FCA authorised operator follows a rigorous procurement process run by the WPP and its advisors, Hymans Robertson and Burges Salmon. This will enable the pooling of circa £15bn of assets across a range of asset classes. The passive mandates of all 8 LGPS funds in Wales are already jointly invested, delivering estimated fee savings of over £2m per annum on assets in excess of £3bn. The appointment of Link represents another key milestone in the pooling process, working towards the Westminster Government’s April 2018 target date.
Link will establish and run an Authorised Contractual Scheme (a tax efficient UK collective investment vehicle) on behalf of the WPP. The ACS will have sub-funds in a range of asset classes that will meet the needs of the investing authorities, enabling them to execute their differing asset allocation strategies. With the support of Russell Investments, and in consultation with the eight individual local authority funds, Link will begin the process of appointing a number of investment manager firms, while the LGPS funds will retain full control over strategic asset allocation decisions. By using fewer investment manager firms with larger mandates, it is expected that the pool will deliver fee savings, one of the primary aims of Government policy.
The WPP’s Joint Governance Committee was established earlier in 2017 and is responsible for oversight of the pool’s operator, Link, and the services it delivers to the LGPS funds in Wales.
Councillor Stephen Churchman, Chairman of the Joint Governance Committee: “After a rigorous selection process, we are delighted to announce the appointment of Link as the operator company for the LGPS investment pool for Wales. The LGPS administering authorities in Wales have a long and successful history of collaboration. We are on track to have the pool operational in early 2018 delivering further investment manager fee savings that will benefit all of the LGPS funds in Wales.”
Carmarthenshire County Council acts as Host Authority, liaising day to day with the operator, Link, on behalf of all of the LGPS funds in Wales.
Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP):
“The appointment of Link is a significant milestone in the establishment of a £15bn investment pool for the LGPS funds in Wales. We look forward to working with Link to deliver the benefits of investment pooling for the LGPS in Wales.”
The Wales Pension Partnership (WPP) comprises of the following LGPS funds: Cardiff and Vale of Glamorgan, City and County of Swansea, Clwyd, Dyfed, Greater Gwent (Torfaen), Gwynedd, Powys and Rhondda Cynon Taf.